The Ministry of Industry and Technology (“Ministry”) has introduced a new regulation, namely the “Regulation on Participation in Venture Capital Funds and Venture Capital Practices” (“Regulation”) which entered into force on 28 November 2025. The Regulation establishes a structured framework for providing public funding from the Ministry to venture capital funds that focus on technology, innovation and technology-driven production.

Key Highlights

• Access to Ministry Funding

The Ministry will launch a fund selection process through calls. Each call will define the eligibility criteria, the maximum public funding available and the required application documents. The Ministry may also issue multiple calls within a year and set specific conditions for each. For newly established funds, if at least 50% of the fund size is committed by other investors, certain eligibility criteria may be removed.

• Evaluation Process

Applications will be reviewed by a Fund Evaluation Committee composed of five experts in finance, economics, investment and venture capital; however, the final decision will rest with the Minister. The assessment will particularly focus on the fund manager’s track record, sector expertise in priority areas, past investment performance and level of investor commitment.

• Investor Agreement Requirement

An investor agreement will be executed between the Ministry and the fund manager, setting out critical terms regarding the fund’s investment strategy, governance, duration and management fees.

• Investment Scope and Restrictions

Investment decisions will be taken by the investment committee, whose structure and procedures will be detailed in the investor agreement. Investments will be prohibited in sectors such as tobacco, alcohol, gambling/betting, purely real estate-based ventures and in businesses engaged in activities that are unlawful, contrary to public order or morality or politically/ethnically driven.

• Reporting, Monitoring and Audit

Fund managers will be required to submit reports to the Ministry every three months and the funds will additionally be subject to independent audits at the end of each fiscal year. In case of misuse or non-compliant use of public resources, the Ministry may suspend commitments or even liquidate the fund.

• Fund Term and Proceeds

The investment and exit periods will be set under the investor agreement. Proceeds from the partial or full disposal of the fund’s shareholdings will return to the fund. If the investment period has not yet expired, these proceeds may be reinvested. However, if the investment period has ended, the proceeds must be transferred to the collection account of the Ministry’s central accounting unit held with the Central Bank of the Republic of Turkey, to be recorded as general budget revenue.

We believe that the Regulation is designed to strengthen Turkey’s venture capital ecosystem by expanding fund sizes, broadening the investor base and enhancing oversight over investments. It is also clear that the Ministry intends to channel public resources into sectors and areas it considers strategically important, thereby supporting venture capital funds that align with national policies and priorities. Additional procedural guidance may also be issued by the Ministry as the implementation phase progresses.

If you require further information or advice on this Regulation, please reach out to us and we will gladly assist.